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The UK spent four bitter years after the 2016 Brexit referendum defining what leaving the EU meant. The process began with studied vagueness, “Brexit means Brexit”, but gradually crystallised into the sovereignty-first version of Brexit delivered by Boris Johnson and Lord David Frost in January.
As Frost himself told a Policy Exchange meeting this week, the beating heart of his Brexit is a “Magna Carta tradition” in which freeborn Englishmen are instinctively opposed to the notion that “other people set laws we have to live by”.
This idea, above all others, explains the emotional, sovereignty-over-market-access approach to the Trade and Co-operation Agreement that Frost concluded with the EU last year.
In January Brexit moved from the abstract realm to the concrete world of commerce, and this landed hardest with small businesses that trade with Europe, most particularly food exporters that bore the brunt of new red tape.
They discovered that reclaiming sovereignty was not an abstract concept, but could be measured in the 71-page stack of customs forms needed to shift a single load of fish into the EU; or for Scottish salmon farmers, £11m in losses.
In the case of the Northern Ireland protocol, as industry experts explained to the Northern Ireland Affairs select committee this week, the cost of reclaiming sovereignty for one food service company came in at about £150 for every consignment of goods sent from Great Britain to Northern Ireland, or about £50,000 since January.
In this sense, as last week’s Office for National Statistics trade data for January showed, Brexit landed with a “bang”, with UK goods exports to the EU dropping more than 40 per cent.
And yet politically this administrative pain has not apparently “cut through” with voters. The Johnson government remains well ahead of Labour in the polls, despite all the well-documented tales of woe from fishermen and pig farmers, to the evident frustration and bewilderment of some leading pro-Remain commentators.
But that lack of impact begs an important question: if the voters are largely oblivious to the disruptions caused by Frost’s “Magna Carta” Brexit, then would they really notice if the government took practical steps to remove them?
By far the biggest of these (leaving aside the need for a mobility chapter that touches on the third rail of immigration policy) would be to sign a “Swiss-style” veterinary agreement with the EU that would, at a stroke, remove almost all the bureaucratic pain being faced by UK food exporters.
Even more importantly, perhaps, it would address the most costly and intractable elements of the Northern Ireland protocol, just as the Democratic Unionist party told the British government it would last summer, but at the time was ignored.
As Sam Lowe at the Centre for European Reform think-tank explains here, such a Swiss-style deal would leave the UK “permanently bound to EU food hygiene rules”, but in return there would be no more need for export health certificates and the reams of other red tape currently strangling UK businesses.
As noted above, no one apart from those directly affected, really cares about food hygiene rules. Is anyone really sitting in the pub, thumping the bar and moaning that their Magna Carta rights have been traduced because Cornish lobstermen are following EU phytosanitary rules? I’d hazard not.
Indeed, such an agreement could be freely entered into by the UK as a “sovereign power”, and freely exited, with a year’s notice, if the UK decided that it wanted to do so, obviously accepting the consequences as it did so.
It would also not, Lowe says, impede Britain’s ability to strike trade deals with the rest of the world, except the US.
That might, on the face of it, be a political deal-breaker, but the truth is, as Joe Biden’s administration has made clear, that a UK-US trade deal is not happening any time soon, and certainly not if the Johnson government of the Northern Ireland protocol undermines the 1998 Belfast Agreement peace deal.
And even if it did happen, it would confront the British government with a huge domestic political fight over accepting alternative US food standards, including hormone-treated beef and chlorine-washed chicken, that it has already demonstrated it has no real appetite for by punting the issue to a trade and agriculture advisory committee.
For now the government maintains the fiction that it could only offer tariff-free entry on goods that conformed to UK standards, but nothing in the USTR negotiating mandate or the history of US trade negotiations suggests the US would accept such limits on its agricultural exports.
Indeed, Biden’s appointment of Tom Vilsack as US agriculture secretary will remind many of how, during Barack Obama’s era, Vilsack furiously fought for US hormone-raised beef during the failed US-EU transatlantic (TTIP) trade negotiation of 2014.
In short, a US trade deal (without which UK-US trade has been growing in recent years) that is not even on the near horizon. Can it therefore really be the reason not to rescue both UK food exporters and the Northern Ireland protocol by quickly rethinking the TCA’s approach with the EU on food hygiene issues?
And given the apparent lack of political impact of the trade disruption so far, would fixing this particular problem — arguably before it caused economic and constitutional damage that did cut through — really upset, or even impinge upon, the vast majority of voters?
I doubt it, nor would such a deal preclude Johnson from burnishing his Global Britain narrative rather than allowing it to be defined by abstruse rules on prawns and pig meat. For once, the government really could have its cake and eat it.
Brexit in numbers
There has been, and I suspect there will continue to be, much debate about trade flows between the EU and the UK since January, with a public spat erupting between the government and the Road Haulage Association over how badly flows are being disrupted.
The government has said that in the last week of January “both outbound and inbound flows (across all UK ports) were close to normal, at 95 per cent outbound and 96 per cent inbound” in spite of the Covid-19 pandemic.
But figures from the IRN Research monthly Freight Ferrystat report, based on information provided by ferry operators, tells a somewhat different story, with February 2021 volumes just over 15 per cent down on last year.
Measuring flows is an inexact science, it depends on varying methodologies and data sets, and of course does not account for what proportion of lorries are actually carrying goods, as opposed to running empty to avoid delays at the border.
The next set of ONS trade data will be watched with interest, although the real story for business is not about short-term disruption but the extent to which Brexit imposes long-term, structural frictions and what that does to EU-UK trade.
Source: Economy - ft.com
